America’s management industry needs a champion for its latest buzzword. A 62-year-old Japanese academic fits the bill

ITH his thick-rimmed spectacles, impeccable manners and predilection for long disquisitions on epistemology, Ikujiro Nonaka hardly seems like a normal management guru. It is impossible to imagine him rigging best-seller lists, dreaming up buzzwords, or doing any of the other things that have become associated with that most dubious of professions. Yet, after two decades of diligent labour in Japanese academia, Mr Nonaka is now returning to the University of California, Berkeley (which gave him his doctorate 25 years ago), as a positively fashionable figure.

Berkeley, famous for its pretension, has just made Mr Nonaka its first ever professor of knowledge (the Haas School of Business, where his chair is based, had wanted to make him a professor of “knowledge management”). Mr Nonaka is also dean of a newly created department of knowledge science at Japan's Advanced Institute of Science and Technology in Hokuriku. The professor's most recent book, “The Knowledge-Creating Company” (Oxford University Press, 1995), which he co-wrote with Hirotaka Takeuchi, has been showered with praise.

The trendiest job in business at the moment is that of a “chief knowledge officer”. Charles Lucier, who holds the title at Booz Allen & Hamilton, calculates that about three-quarters of the companies the consultancy deals with either have “knowledge initiatives” in place or are about to launch them. Simon Trussler, who holds the job but not the title at Boston Consulting Group, says that he gets invited to a conference on knowledge every few weeks. There is a specialist magazine, Knowledge, Inc, based in Mountain View, California. There are currently three new books in the shops with the phrase “intellectual capital” in their titles (proving, if nothing else, that the gurus' emphasis on creativity and communication does not extend to their own book titles). According to Dataquest, a research firm, the market for “knowledge-management services” will reach $3.6 billion in 1998—against $2.6 billion this year and just $400m in 1994.

Mr Nonaka's acolytes like to ascribe his pre-eminence in this burgeoning field to his taste for rigorous philosophising (“The Knowledge-Creating Company” is pretty heavy stuff by the standards of most popular management tomes). Yet people no more buy management books for their insights into epistemology than they read Playboy for the essays by John Updike. More important, perhaps, to Americans is the fact that Mr Nonaka is Japanese. Now that the American fad of re-engineering, which involved introducing lots of computers and cutting out lots of jobs, is under something of a cloud, management thinkers have started looking to Japan once again for new ideas.

When set beside most modern American writers, Mr Nonaka's thoughts about knowledge seem different in at least two ways. The first is his relative lack of interest in information technology. Many American companies equate “knowledge creation” with setting up computer databases. Mr Nonaka argues that much of a company's knowledge bank has nothing to do with data, but is based on informal “on-the-job” knowledge—everything from the name of a customer's secretary to the best way to deal with a truculent supplier. Many of these titbits are stored in the brains of middle managers—exactly the people whom re-engineering replaced with computers.

The second thing that makes Mr Nonaka stand out is his insistence that companies need plenty of slack to remain creative. Allow employees time to pursue hare-brained schemes—or just to sit around chatting—and you may come up with a market-changing idea, argues Mr Nonaka; force them to account for every minute of their day, and you will be stuck with routine products.

All this explains why Mr Nonaka makes such an ideal philosopher king for all the consultancies and publishers keen to ram “knowledge management” down the gullet of corporate America. But is “knowledge” really likely to take off in the same way that re-engineering did? It is actually a fairly old idea. Friedrich von Hayek observed decades ago that a company's most important asset was its ability to process information. Peter Drucker invented the term “knowledge worker” 38 years ago. Even Mr Nonaka's ideas about implicit knowledge have their antecedents: Kenneth Arrow, an American thinker, emphasised the importance of informal knowledge to companies back in the 1960s.

More fundamentally, knowledge remains an infuriatingly vague subject to write about—let alone sell. Telling a reasonably effective modern company that it should focus on “knowledge creation” is rather like telling an orchestra that it should concentrate on “music making”. Some firms become extremely good at husbanding ideas—3M is one example—but it tends to be a fragile process that evolves over decades, rather than a simple set of rules that firms can learn in an afternoon. And different rules seem to apply to different firms. For instance, Michael Jensen of the Harvard Business School has pointed out that some firms can use knowledge best by centralising, others by decentralising.

Mr Nonaka's own work is open to the charge of being too narrow. He has focused relentlessly on large, well-established Japanese firms. This helps explain his popularity with large, well-established American companies. But many of today's best knowledge-generating firms are networks of tiny start-ups. Silicon Valley, for instance, works by rather different rules than those laid down by Mr Nonaka. Institutional memory is weak and middle managers rare: “knowledge generation” appears to be split between individual entrepreneurs and the Valley's collective intellectual infrastructure. Such differences, exceptions and complications will no doubt enliven the cerebral Mr Nonaka's stay in nearby Berkeley; but they mean that “knowledge management” will remain a hard fad for some of his admirers to sell to company bosses.